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Central Board of Indirect Taxes and Customs (CBIC)

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Tag: Central Board of Indirect Taxes and Customs (CBIC)

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Know New Functionality in GST to find your GST Tax Officer Online

Know New Functionality in GST to find your GST Tax Officer Online

The Central Board of Indirect Taxes and Customs (CBIC) has recently enabled the new functionality on the GST portal for the taxpayer to find out contacts details of Tax Officials. This functionality will help to reduce the gap between the Tax Payer and Tax officers. Further, the said functionality shall be effective to use at the time of litigation, grievance, queries or concerns. etc. However, we can’t rely completely on the given contact details as these will be changed from time to time.

However, This is a good initiative from the Central Board of Indirect Taxes and Customs (CBIC) side in order to provide smooth connectivity between the taxpayer and Tax official. The following details shall appear at the time of entering details of Tax officer:

  1. Name
  2. Designation
  3. Address
  4. E-Mail Address
  5. Mobile Number

The contact details of the selected official shall appear as follows.

Herewith, we have provided step-by-step guidance for accessing the functionality.

STEP-1: Access the www.gst.gov.in URL. The GST Home page is displayed. Login to the portal with valid credentials. The dashboard page is displayed. Click on> Services > Legers:

STEP-2: Under Ledgers, ‘Ledgers Quick Links’ Page will be displayed, select the ‘Negative Liability Statement’.

STEP-3: Subsequently clicking on the ‘Negative Liability Statement’, again click on the “Services” then go to “User Services” Tab.

STEP-4: The drop-down menu from User services will appear then select “Contact” option from the menu.

STEP-5: Afterward, under the Dropdown option of “Category” select ‘Centre/State’ as per the requirement and fill in the requisites details for extracting the information.

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Instructions w.r.t. issuance of SCNs and adjudication process

Instructions w.r.t. issuance of SCNs and adjudication process

The Central Board of Indirect Taxes and Customs (CBIC) issued Instructions vide F. No. CBIC -90206/1/2021-CX-IV Section-CBEC dated November 18, 2021 regarding issuance of Show Cause Notices (“SCNs”) and disposal of adjudication matters including call book cases.

Audit para no. 5.1 to 5.18 of chapter V of Audit report no. 01 of 2021 on Show Cause Notices and adjudication process in CBIC has made certain observations regarding issuance of SCNs and disposal of adjudication matters including call book cases.

Briefly, the Audit has pointed that

(i) Draft SCNs have been found pending for issuance.

(ii) There is inordinate delay in adjudication.

(iii) Adjudication orders have not been issued within stipulated period after completion of personal hearings.

(iv) Periodical review of call book cases has not been done.

(v) In certain cases, the records/files pertaining to adjudication have not been produced before Audit Party.

With the introduction of GST law, Board has consistently expressed its desire and resolve that it is of utmost importance to dispose the legacy matters related to Central Excise and Service Tax regime as expeditiously as possible. In this regard, Board has issued instructions from time to time regarding disposal of legacy issues such as issuance of Show cause notice, adjudication of SCNs, review of call book cases, etc.

However, in view of the observations of Audit, Board desires that the following directions must be strictly adhered to:

Once the investigation is over/analysis is done and draft show cause notice is prepared, SCN should be issued without any delay, without waiting for the last date of issuance of SCN.

Attention is invited to sub-section (11)of section 11A of Central Excise Act, 1944 read with sub-section (4B) of section 73 of the Finance Act, 1994 which stipulates that SCNs issued in normal cases should be adjudicated within six months in respect of Central Excise (CE) & Service Tax (ST), and SCNs issued involving extended period should be adjudicated within two years relating to CE and one year relating to ST where it is possible to do so. Board desires that the time limits mentioned in relevant Acts must be adhered to.

On the issue of delay in issuance of adjudication order within stipulated period of one month after final personal hearing has been conducted and non-recording of reason for the delay, reference is invited to para 14.10 of the Master circular No. 1053/02/2017-CX dated March 10, 2017 wherein, interalia, it has been stated that:

“14.10 Issue and Communication of order: In all cases where personal hearing has been concluded, it is necessary to communicate the decision as expeditiously as possible but not later than one month in any case, barring in exceptional circumstances to be recorded in the file. The order is required to be communicated to the assessee in terms of provisions of Section 37C of the CEA, 1944.”

Audit has observed that in certain cases, adjudication orders have been issued beyond stipulated period and no justification has been recorded in the file explaining delay. It is, therefore, reiterated that timelines of completing adjudication process must be followed and in exceptional cases of delay beyond stipulated period, reasons for the delay must be recorded on file.

Audit in its report has also pointed incidences of periodical non-review of Call Book cases, non/delayed retrieval of SCNs from Call Book, incorrect transfer of SCNs to Call Book, resulting in irregular retention of cases in Call Book.

Kind attention is invited to Board’s D.0 letter F. No. 101/2/92- CX.3 dated March 04, 1992 wherein while indicating the categories of the cases to be transferred to call book, it was directed that a case should be transferred to call book only with the approval of Commissioner. Further, the Commissioners were instructed to review the Call book cases on monthly basis. These instructions have subsequently been reiterated vide Circular No. 385/18/98-CX, dated March 30, 1998 and Circular No. 719/35/2003-CX dated May 28, 2003. Audit has pointed out certain instances where Call book cases are not reviewed periodically, due to which, there are instances of delay in retrieval of Call book cases. It is therefore, reiterated that instructions in above mentioned D.0 letter and subsequent instructions/circulars must be adhered to and Pr. Commissioners/Commissioners must review Call book cases on monthly basis. Non-adherence to these instructions shall be viewed seriously.

Audit has also pointed certain instances where noticees are not intimated about transfer of SCNs to Call book. Attention is invited to para 9.4 of the instructions issued vide Master circular No. 1053/02/2017-CX dated March 10, 2017 which reads as under:

“9.4 intimation of Call Book cases to noticee: A formal communication should be issued to the noticee, where the case has been transferred to the call book.”

Therefore, it should be ensured that instructions issued vide Master circular no.1053/02/2017/CX dated March 10, 2017 in this regard are adhered to.

Further, it has been pointed that in contravention to the Board’s D.O letter dated March 04, 1992, there are instances where prior approval is not taken from the Commissioner before transferring the case to Call book. In this regard, the instructions issued by Board vide above mentioned D.O letter dated March 04, 1992 are reiterated. The cases must be transferred to call book only with the approval of Commissioner as stipulated earlier. A comprehensive one-time review of all cases may also be carried out in this regard and necessary action taken.

For proper handling of Call book cases, instructions have been issued by Board from time to time such as those mentioned in Circular No 1023/11/2016-CX dated April 08, 2016 and Circular No.1053/02/2017-CX dated March 10, 2017. Such instructions issued from time to time may be gone through and followed without fail.

Audit has also pointed out cases/instances where the case files/records pertaining to adjudication have not been produced before audit.

In Audit para 5.16 of Chapter-V of Audit report no. 01 of 2021 it has been stated that “Despite Board’s Instructions vide DO letter F. No. 232/Mist DAPs/2018-CX-7 dated April 26, 2018 regarding cooperation with the C&AG during audit, by providing complete and comprehensive information, the department did not produce the complete records such as DSCN files, waiver of SCN files, SCNs pending for adjudication, adjudication cases, Call Book, transfer of records due to GST and List of total records.”

In this regard it may be noted that vide aforesaid Chairman’s D.0 letter dated April 26, 2018, it was directed that full cooperation with the C&AG team would be provided by providing complete and comprehensive information available with the concerned Commissionerate. Any feeble excuses in this regard would not be entertained.

In this regard reference is invited to Circular dated April 29, 1988 issued from F.No. 240/15/88-CX.7 wherein it has been communicated that the files leading to passing of adjudication/appellate orders need not be made available to the audit parties of the Accountant General. It may be seen that the above-mentioned Circular was issued keeping in view the basic premise that audit parties cannot question the decision taken by the judicial or quasi-judicial authority. The said circular thus needs to be read in proper context that sharing of records with audit parties does not interfere with the judicial/quasi-judicial proceedings. The audit parties may require the production of the records for ensuring that due procedure is followed or otherwise. Therefore, the request of the Audit for production of records must be acceded to..

Attention is invited to the instructions issued by the Board vide Circular No. 716/32/2003-CX., dated May 25, 2003 wherein the Commissioners and Chief Commissioners have been directed to analyze the reasons for pendency of adjudication cases and strengthen the monitoring system. These instructions have also been reiterated from time to time. In this regard MPR DPM-ST-1A and DPM-CE-1A of the Monthly Progress Report (MPR) incorporate information relating to adjudication of pending cases and their disposal. Accordingly, Pr. Chief Commissioner/Chief Commissioner & Pr. Commissioner/Commissioner must undertake periodic review of adjudication of pending cases.

Difficulty experienced, if any, in implementing the circular should be brought to the notice of the board.

Instructions-for-SCNs-and-Adjudication-Process

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CBDT and Customs provided facilities for Exporters having IGST Refund Issue

CBDT and Customs provided facilities for Exporters having IGST Refund Issue

The Central Board of Indirect Taxes and Customs (CBIC) has extended the time limit for sanction of pending IGST refunds in such cases where records have not been transmitted to ICEGATE due to GSTR1 and GSTR3B mismatch error. This overcomes the problem of refund blockage by allowing refunds subject to undertakings/submission of CA certificates by the exporters and post refund audit scrutiny. This facilitation was issued Vide Circular 04/2021 and would be applicable to all shipping bills filed up to 31.03.2021.

The CBIC has also extended the facility for resolving invoice mismatch errors (classified as SB-005 error) through customs officer interface on permanent basis vide Circular 05/2021. Earlier this facility was provided for a limited period i.e. in respect of shipping bills filed up to 31.12.2019.
The exporter may avail the facility of correction of Invoice mis-match errors (error code SB-005) in respect of all past shipping bills, irrespective of its date of filing subject to payment of a nominal fee.

The CBIC has continuously taken a proactive approach to resolve issues faced by the trade. It is seen that a considerable number of exporters have been facing difficulties in getting their IGST refund sanctioned either due to lack of facility to amend GST 3B return or bona-fide clerical/human errors while filing the documents. With the endeavor of resolving all such pending IGST refund claims, CBIC has issued Circular 04/2021-Customs dated 16.02.2021 and Circular 05/2021-Customs dated 17.02.2021.

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Handling of mismatch between Shipping Bill and GST returns in Customs Automated System to be charged @ Rs 1000

Handling of mismatch between Shipping Bill and GST returns in Customs Automated System to be charged @ Rs 1000

The Central Board of Indirect Taxes and Customs (CBIC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview.

Levy of Fee (Customs Documents) Regulations, 1970 allows the proper officer to permit an IGM to be amended or supplemented, on payment of prescribed fees, if he is satisfied that there is no fraudulent intention. The said regulations have also been amended vide Notification No. 36/2017-Customs (N.T.) dated 11thApril, 2017 to revise the fee(s) for carrying out amendments. The quantum of fee has been revised upwards so as to calibrate it to the realistic levels and also to discourage the tendency to file amendments.

The CBIC on February 17, 2021 has issued the Levy of Fees (Customs Documents) Amendment Regulations, 2021 to further amend the Levy of Fees (Customs Documents) Regulations, 1970. Handling of mismatch between Shipping Bill and GST returns in Customs Automated System will be now charged at Rs 1000.

An exporter, while sending goods from one country to another has to go through various formalities including submitting various applications, acquiring licenses, paying duties and so on. To acquire a clearance for export, from the Customs, an exporter will have to submit an application called the ‘shipping bill’. One cannot load the goods unless the exporter files the shipping bill.

The Indian Customs EDI System (ICES) is designed to exchange/transact customs clearance related information electronically using Electronic Data Interchange (EDI). A large number of documents that trade, transport and regulatory agencies (collectively called Trading Partners) are required to submit/ receive in the process of live customs clearance are now being processed online.

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New Rule introduced which restricts amount available in electronic credit ledger under GST

New Rule introduced which restricts amount available in electronic credit ledger under GST

Input Tax Credit (ITC) basically means reducing the taxes paid on inputs from taxes to be paid on output. When any supply of services or goods is supplied to a taxable person, the GST charged is known as Input Tax. According to Section 16(1) of the CGST Act, every registered taxable person shall, subject to such conditions and restrictions as may be prescribed and within the time and manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.

What do you mean by the Electronic Credit Ledger?

The electronic credit ledger reflects the amount of Input Tax Credit available to the taxpayer. Thus, every claim of input tax credit of the registered taxpayer eligible for claiming such a credit is credited to this ledger. The amount available in the electronic credit ledger is utilized in making payments towards outward tax liability by the registered taxpayer.

Insertion of new Rule 86B

The Central Board of Indirect Taxes and Customs (CBIC) has introduced Rule 86B in GST rules which restricts use of input tax credit (ITC) for discharging GST liability to 99%.

The Rule states that, the registered person shall not use the amount available in electronic credit ledger to discharge his liability towards output tax in excess of 99% of tax liability, in cases where the value of taxable supply in a month exceeds Rs 50 lakh.

Who will this Rule be applicable to?

Businesses with monthly turnover of over Rs 50 lakh will have to mandatorily pay at least 1% of their GST liability in cash. Rs 50 lakhs limit to be checked for each month. This Rule was introduced to curb evasion by fake invoicing.

While calculating the turnover threshold, sales from GST exempt goods and zero rates supply would not be included.

When shall this Rule not be applicable?

This rule is not applicable in the following cases:

  • Where the said person or the proprietor or karta or the managing director or any of its two partners, whole-time Directors, Members of Managing Committee of Associations or Board of Trustees, as the case may be, have paid more than Rs 1 lakh as income tax in each of the last two financial years for which the time limit to file return of income under section 139(1) has expired; or
  • Where the registered person has received a refund amount of more than Rs 1 lakh in the preceding financial year on account of unutilised input tax credit under clause (i) of first proviso of sub- section (3) of section 54; or
  • Where the registered person has received a refund amount of more than Rs 1 lakh in the preceding financial year on account of unutilised input tax credit under clause (ii) of first proviso of sub- section (3) of section 54; or
  • where the registered person has discharged his liability towards output tax through the electronic cash ledger for an amount which is in excess of 1% of the total output tax liability, applied cumulatively, up to the said month in the current financial year; or
  • the registered person is –
    1. Government Department; or
    2. a Public Sector Undertaking; or
    3. a local authority; or
    4. a statutory body:

The Commissioner or an officer authorised by him in this behalf may remove the said restriction after such verifications and such safeguards as he may deem fit.

For instance, In the FY 2020-2021, up to November 2020, output tax liability comes to Rs 20 lakh and taxpayer deposited Rs 22,000 in cash up to Nov 2020 then this rule is not applicable

Further amendments provided by CBIC

  • The CBIC also amended GST rules restricting filing of outward supply details in GSTR-1 for business that did not pay tax for the past periods by filing GSTR 3B.
  • Till now, non-filing of GSTR 3B resulted in blockage of e-way bill, but the same would now result in GSTR 1 blockage as well.
  • The CBIC has also notified authentication of Aadhaar number or physical verification of business premises for the purposes of obtaining GST registration.
  • Also, the validity of electronic way bill provisions has been amended by the CBIC according to which the e-way bill will be valid for 1 day for every 200 km of travel, as against 100 km earlier.

The notified measures would help tackle menace of fake invoices for availing and passing on of input tax credit (ITC) by fraudsters. Collectively these steps are likely to control dummy registrations and fake billing for ITC to take GST process towards a cleaner and robust regime.

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CBIC extends some Due date of GST compliance till 31st March, 2021

CBIC extends some Due date of GST compliance till 31st March, 2021

The COVID 19 pandemic has been largely disruptive to the growth of India. With an ever-increasing corona virus cases, lockdown was considered as an only solution to flatten the curve. However, the measures which were implemented to avoid a human disaster, have in turn led to the birth of several issues such as unemployment, recession, hindrance to economic growth, financial instability and so on.

Due to the emerging financial distress faced by most people on account of the large-scale economic distress caused by COVID 19, the Government of India had extended the due dates of various provisions to provide relief in the current pandemic situation.

The Central Board of Indirect Taxes and Customs (CBIC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview.

CBIC has now extended the Due Date of GST compliance till 31st March, 2021 during the period from the 20th March, 2020 to the 29th November, 2020, vide Notification No. 91/2020 – Central Tax dated 14.12.2020

The notification seeks to amend the notification No. 65/2020 Central Tax, dated the 1st September, 2020, which stated that where, any time limit for completion or compliance of any action, by any authority, has been specified in, or prescribed or notified under section 171 of the said Act, which fell during the period from the 20th of March, 2020 to the 29th of November, 2020, and where completion or compliance of such action has not been made within such time, then, the time-limit for completion or compliance of such action, shall be extended up to the 30th of November, 2020.

In terms of Section 171 of the CGST Act, 2017, the suppliers of goods and services should pass on the benefit of any reduction in the rate of tax or the benefit of input tax credit to the recipients by way of commensurate reduction in prices.

Now as per the revised notification, where, any time limit for completion or compliance of any action, by any authority, has been specified in, or prescribed or notified under section 171 of the said Act, which fell during the period from the 20th of March, 2020 to the 30th of March, 2021, and where completion or compliance of such action has not been made within such time, then, the time-limit for completion or compliance of such action, shall be extended up to the 31st of March, 2021.

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Is there any late fee if GSTR 3B is filed after the due date?

Is there any late fee if GSTR 3B is filed after the due date?

The COVID 19 pandemic has been largely disruptive to the growth of India. With an ever-increasing corona virus cases, lockdown was considered as an only solution to flatten the curve. However, the measures which were implemented to avoid a human disaster, have in turn led to the birth of several issues such as unemployment, recession, hindrance to economic growth, financial instability and so on.

Due to the emerging financial distress faced by most people on account of the large-scale economic distress caused by COVID 19, the Government of India had extended the due dates of various provisions to provide relief in the current pandemic situation. The Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman announced several important relief measures taken by the Government of India in view of COVID-19 outbreak, especially on statutory and regulatory compliance matters related to several areas of Income Tax, GST, Customs and Corporate Affairs.

The Central Board of Indirect Taxes and Customs (CBIC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview. On 15th October, CBIC came up with the various notifications for prescribing the due dates for filing GSTR 3B.

What is GSTR 3B?

  • The GSTR-3B is a consolidated summary return of inward and outward supplies that the Government of India has introduced as a way to relax the requirements for businesses that have recently transitioned to GST.
  • In other words, it is a simplified method that helps to declare the summary of GST liabilities for a given tax period.
  • One cannot amend GSTR-3B and dealers must file separate GSTR-3B for each of their GSTIN.
  • All GST registrants must file GST return 3B including ‘NIL’ returns.

Who is required to file GSTR 3B?

All the registered taxpayers are required to file GSTR 3B, except:

  • Input Service Distributors
  • Composition Dealers
  • Non-resident Taxable Person
  • Small taxpayers
  • Suppliers of OIDAR (Online Information and Database Access or Retrieval)

What is the due date for furnishing GSTR 3B as prescribed by CBIC?

The CBIC prescribed the due dates of filing GSTR 3B vide Notification No. 76/2020 – Central Tax dated 15th October, 2020 as follows:

Taxpayers having an aggregate turnover of more than Rs 5 crores in the previous financial year

Month for which details in GSTR-3B are furnishedTime period for furnishing details in GSTR-3B
October 202020th November 2020
November 202020th December 2020
December 202020th January 2021
January 202120th February 2021
February 202120th March 2021
March 202120th April 2021

Taxpayers having an aggregate turnover of up to Rs 5 crore in the previous financial year, whose principal place of business is in Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh, the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands or Lakshadweep

Month for which details in GSTR-3B are furnishedTime period for furnishing details in GSTR-3B
October 202022th November 2020
November 202022th December 2020
December 202022th January 2021
January 202122th February 2021
February 202122th March 2021
March 202122th April 2021

Taxpayers having an aggregate turnover of up to Rs 5 crore in the previous financial year, whose principal place of business is in Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha, the Union territories of Jammu and Kashmir, Ladakh, Chandigarh or Delhi

Month for which details in GSTR-3B are furnishedTime period for furnishing details in GSTR-3B
October 202024th November 2020
November 202024th December 2020
December 202024th January 2021
January 202124th February 2021
February 202124th March 2021
March 202124th April 2021

Is interest payable on not filing GSTR 3B?

Interest is applicable on Late Payment of GST Due Interest has to be paid by every taxpayer who:

  • Makes a delayed GST payment i.e. pays GST after the due date.
  • Claims excess Input Tax Credit
  • Reduces excess Output Tax Liability

Currently, GST has to be paid at the time of filing GSTR-3B and GSTR-4.If GST is not paid within the due dates of filing return Interest at following rates has to be paid:

ParticularsInterest
Tax paid after due date18%
Excess ITC Claimed or excess reduction in Output Tax24%

The Interest has to be calculated from the next day on which tax was due.

What do you mean by late fees under GST?

  • Every registered person under GST is required to file monthly or quarterly return and annual return within the due date depending upon the type of the taxpayer status.
  • However, if such a taxpayer fails to pay tax or file returns within the prescribed due date, he shall have to pay late fee along with interest on the late payment of GST.
  • Such a fee is charged for each day during which such a failure continues on the part of the registered taxpayer after the due date to file returns.
  • Late fees are also applicable on NIL Returns.

Is any late fee leviable if GSTR 3B is not filed within the due dates mentioned above?

  • Late fees for GSTR-3B is Rs. 20 (Rs. 10 for CGST and Rs. 10 for SGST) per day for NIL returns.
  • In other cases, it is Rs. 50 (Rs. 25 for CGST and Rs. 25 for SGST).
  • A return in which there is no sales but has purchases is also considered as NIL return. Maximum amount of penalty will be Rs. 10,000 (Rs. 5,000 for CGST and Rs. 5,000 for SGST) for every return.
  • Late fees for GSTR-3B for a month is required to be paid in the next month. You cannot file a month’s return before making payment of late fees of previous month.

It is also important to remember that the GSTR amnesty scheme for GSTR 3B ended on 30th of September, where there was a cap on the payment of late fees. Now late fees are calculated as per the original rules from date of default as provided above.

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Is there any late fee if GSTR 1 is filed after the due date?

Is there any late fee if GSTR 1 is filed after the due date?

The COVID 19 pandemic has been largely disruptive to the growth of India. With an ever-increasing corona virus cases, lockdown was considered as an only solution to flatten the curve. However, the measures which were implemented to avoid a human disaster, have in turn led to the birth of several issues such as unemployment, recession, hindrance to economic growth, financial instability and so on.

Due to the emerging financial distress faced by most people on account of the large-scale economic distress caused by COVID 19, the Government of India had extended the due dates of various provisions to provide relief in the current pandemic situation. The Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman announced several important relief measures taken by the Government of India in view of COVID-19 outbreak, especially on statutory and regulatory compliance matters related to several areas of Income Tax, GST, Customs and Corporate Affairs.

The Central Board of Indirect Taxes and Customs (CBIC) is a part of the Department of Revenue under the Ministry of Finance, Government of India. It deals with the tasks of formulation of policy concerning levy and collection of Customs, Central Excise duties, Central Goods & Services Tax and IGST, prevention of smuggling and administration of matters relating to Customs, Central Excise, Central Goods & Services Tax, IGST and Narcotics to the extent under CBIC’s purview. On 15th October, CBIC came up with the various notifications for prescribing the due dates for filing GSTR 1.

What is GSTR 1?

GSTR-1 is a monthly or quarterly return that should be filed by every registered dealer. It contains details of all outward supplies i.e sales.GSTR 1 once filed cannot be revised. Any mistake made in the return can be rectified in the next periods (month/quarter) return. It means that if a mistake is made in May GSTR-1, rectification for the same can be made in June’s GSTR-1.

Who is required to file GSTR 1?

All the registered taxpayers are required to file GSTR 1, except:

  • Input Service Distributors
  • Composition Dealers
  • Non-resident Taxable Person
  • Taxpayers liable to collect TCS
  • Taxpayers liable to deduct TDS
  • Suppliers of OIDAR (Online Information and Database Access or Retrieval)

What is the due date for furnishing GSTR 1 as prescribed by CBIC?

CBIC notified that the registered persons having aggregate turnover of up to Rs 1.5 crore in the preceding financial year or the current financial year, can file their GSTR 1 as per the due date mentioned below:

Quarter for which details in GSTR-1 are furnishedTime period for furnishing details in GSTR-1
October, 2020 to December, 202013th January, 2021
January, 2021 to March, 202113th April, 2021

CBIC also notified the time-limit for furnishing the details of outward supplies in GSTR-1 by registered persons having aggregate turnover of more than Rs 1.5 crore in the preceding financial year or the current financial year as follows:

Month for which details in GSTR-1 are furnishedTime period for furnishing details in GSTR-1
October 202011th November 2020
November 202011th December 2020
December 202011th January 2021
January 202111th February 2021
February 202111th March 2021
March 202111th April 2021

What do you mean by late fees under GST?

  • Every registered person under GST is required to file monthly or quarterly return and annual return within the due date depending upon the type of the taxpayer status.
  • However, if such a taxpayer fails to pay tax or file returns within the prescribed due date, he shall have to pay late fee along with interest on the late payment of GST.
  • Such a fee is charged for each day during which such a failure continues on the part of the registered taxpayer after the due date to file returns.
  • Late fees are also applicable on NIL Returns.

Is any late fee leviable if GSTR 1 is not filed within the due dates mentioned above?

Section 47 of the CGST Act pertains to levy of late fees under GST. According to Section 47(1), Anyregistered person who fails to furnish the details of outward or inward supplies requiredunder section 37 or section 38 or returns required under section 39 or section 45 by the due dateshall pay a late fee of Rs 200 (Rs 100 under CGST and Rs 100 under SGST/UTGST) for every dayduring which such failure continues subject to a maximum amount of Rs 5000

Therefore, if any taxpayer does not file GSTR 1 by the due dates mentioned above, he/she will be liable to pay late fees of Rs 200 (Rs 100 under CGST and Rs 100 under SGST/UTGST) for every day during which such failure continues subject to a maximum amount of Rs 5000.

It is also important to remember that, if the registered taxpayer fails to file NIL Return on or before the due date, he shall be liable to pay late fees of Rs 50 for every day during which such failure continues under CGST Act. Similar provisions exist under the SGST Act, 2017. Thus, a late fee of Rs.100 per day (Rs. 50 under CGST law + Rs. 50 under State / Union Territory GST law) would be levied as per CGST Act, 2017 and State / Union Territory GST Act, 2017.

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CBIC FAQ on Manufacture and Other Operations in Customs Warehouse

Frequently Asked Questions on Manufacture and Other Operations in Customs Warehouse

The Central Board of Indirect Taxes and Customs (CBIC) have launched a revamped and streamlined program to attract investments into India and strengthen Make in India. This program is based upon Section 65 of the Customs Act, 1962, which enables conduct of manufacture and other operations in a Customs bonded warehouse. The program has been introduced vide the Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019, (hereinafter referred to as MOOWR, 2019) and explained through Circular-34/2019- Customs dated 01st October, 2019.

Under this program a unit can import goods (both inputs and capital goods) under customs duty deferment with no interest liability. There is no investment threshold or export obligation. The duties are fully remitted if the goods resulting from such operations are exported. Import duty is payable only if the resulting goods or imported goods are cleared in the domestic market (ex-bonding). The salient features of the program are:

i. No geographical limitation on where such units can be set up.

ii. A single application cum approval form for uniformity of practice with a single point of approval to set up the operations of such units.

iii. Improved liquidity with deferment of import duty and no interest liability.

iv. Allows procurement of GST compliant goods from the domestic market for use in manufacture and other operations in a Section 65 unit.

v. A single digital account for ease of doing business and easy compliance.

vi. Enables efficient capacity utilization, as there is no limit on quantum of clearances that can be exported or cleared to the domestic market.

CBIC has gathered certain queries through trade consultations which have been consolidated and answered below.

1. Who is eligible for applying for manufacture and other operations in a bonded warehouse?

Response: The following persons are eligible to apply for manufacture and other operations in a bonded warehouse, –

i. A person who has been granted a licence for a warehouse under Section 58 of the Customs Act, in accordance with Private Warehouse Licensing Regulations, 2016.

ii. A person can also make a combined application for licence for a warehouse under Section 58, along with permission for undertaking manufacturing or other operations in the warehouse under Section 65 of the Act.

The persons mentioned have to be a citizen of India or an entity incorporated or registered in India.

2. Can a factory which is solely into manufacturing goods, which are to be sold in the domestic market, eligible for applying for manufacture and other operations in a bonded warehouse?

Response: The eligibility of a factory for manufacture and other operations in a bonded warehouse does not depend upon whether the final goods will be sold in the domestic market or exported. There is no quantitative restriction on sale of finished goods in the

domestic market. Any factory can avail a license under Section 58 of the Customs Act along with permission under Section 65 if they intend to import goods without upfront payment of Customs duty at point of import and deposit them in the warehouse, either as capital goods or as inputs for further processing.

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3. Is an existing factory which solely manufactured goods to be sold in the domestic market, eligible for application for manufacture and other operations in a bonded warehouse? How will the existing capital goods and inputs be accounted?

Response: Yes. Any unit in Domestic Tariff Area (DTA) is eligible for making an application for manufacture and other operations in a bonded warehouse i.e. an old factory in DTA is eligible for applying.

The accounting form prescribed for the units undertaking manufacture and other operations in a bonded warehouse provides for accounting of DTA receipts. Thus the existing capital goods and inputs must be accounted in the accounting form prescribed. The form also provides for a remarks column in case certain remarks are to be entered.

4. Is manufacture and other operations in a bonded warehouse allowed in Public Bonded Warehouse licensed under Section 57 of the Customs Act?

Response: No. At present, manufacture and other operations in a bonded warehouse is allowed only in a Private Bonded Warehouse licensed under Section 58 of the Customs Act.

5. Will a unit licensed under Section 65 and Section 58 of the Customs Act, 1962, be under the physical control of Customs?

Response: No. There is no physical control of a unit licensed under Section 65 and Section 58 of the Customs Act, 1962, on a day to day basis. The unit will be subject to risk based audits.

6. Can the license under Section 65 and Section 58 of the Customs Act, 1962, be obtained on bare land with identified boundaries or a built structure is imperative for obtaining the said license?

Response: The regulations do not mandate that a fully enclosed structure is a pre- requisite for grant of license. What is important is that the site or building is suitable for secure storage of goods and discharge of compliances, such as proper boundary walls, gate(s) with access control and personnel to safeguard the premises. Moreover, depending on the nature of goods used, the operations and the industry, some units may operate without fully closed structures. The Principal Commissioner/Commissioners of Customs will take into consideration the nature of premises, the facilities, equipment and personnel put in place for secure storage of goods, while considering grant of license.

7. Do we need to renew license under Section 58 or permission under Section 65?

Response: The license and permission granted is valid unless it is cancelled or surrendered, or the license issued under Section 58 is cancelled or surrendered. Thus no renewal of the license under Section 58 or permission under Section 65 is required.

8. Can a unit undertaking manufacture and other operations in a bonded warehouse import capital goods without payment of duty? If yes, whether only BCD or both BCD and IGST on imports is covered? For how long is duty deferment available? Is interest payable after some time?

Response: A unit licensed under Sections 58 and 65 can import capital goods and warehouse them without payment of duty. Manufacture and other operations in a bonded warehouse is a duty deferment scheme. Thus both BCD and IGST on imports stand deferred. In the case of capital goods, the import duties (both BCD and IGST) stand deferred till they are cleared from the warehouse for home consumption or are exported. The capital goods can be cleared for home consumption as per Section 68 read with Section 61 of the Customs Act on payment of applicable duty without interest.  The capital goods can also be exported after use, without payment of duty as per Section 69 of the Customs Act. The duty deferment is without any time limitation.

9. Would any customs duty be payable on the goods manufactured in the bonded premises using the imported capital goods (on which duty has been deferred) and sold into the domestic tariff area?

Response: The payment of duty on the finished goods is clarified in Para 8 and 9 of the Circular No. 34/2019. Duty on the capital goods would be payable if the capital goods itself are cleared into the domestic market (home consumption). Thus the duty on the capital goods does not get incorporated on the finished goods. Thus no extra duty on finished goods cleared into DTA is payable on account of imported capital goods (on which duty has been deferred).

10. Can a unit undertaking manufacture and other operations in a bonded warehouse import inputs without payment of duty? If yes, whether only BCD or both BCD and IGST on imports is covered? For how long is duty deferment available? Is interest payable after some time?

Response: Manufacture and other operations in a bonded warehouse is a duty deferment scheme. Thus both BCD and IGST on imports stand deferred. In the case of goods other than capital goods, the import duties (both BCD and IGST) stand deferred till they are cleared from the warehouse for home consumption, and no interest is payable on duty. In case the finished goods are exported, the duty on the imported inputs (both BCD and IGST) stands remitted i.e. they will not be payable. The duty deferment is without any time limitation.

11. Is import of raw material without BCD and IGST allowed? Will there be any interest obligation if IGST is paid when finished goods are sold in domestic markets?

Response: Inputs/raw materials can be imported and deposited in the licensed warehouse without payment of BCD and IGST. No interest liability arises when the duties are paid at the time of ex-bonding the resultant goods. The duties (without any interest) are to be paid only when the resultant goods are being cleared for home consumption.

12. Would it be mandatory to appoint a warehouse keeper in the factory licensed under Section 65 of the Customs Act? Would all goods cleared from the said factory be subject to inspection by the warehouse keeper/ Customs authorities?

Response: A warehouse keeper has to be appointed, for a premise to be licensed as a private warehouse under Section 58 of the Customs Act. The warehouse keeper is expected to discharge duties and responsibilities, maintain accounts and also sign the documents, on behalf of the licensee. The warehouse keeper is expected to supervise and satisfy himself about the veracity of the declaration/accounts that he is signing.

The inspection of goods by customs at the stage of ex-bonding would be done, only if there is indication of risks and not as a matter of routine practice. Approval of the bond officer is not required for clearance of the goods from the warehouse.

13. How frequently is an audit of a unit operating under Section 65 of Customs Act, 1962 expected?

Response: The audit of units operating under Section 65 would also be based on risk criteria. There is no prescribed frequency for such audit.

14. What are the customs document/ form for movement of imported goods on which duty has been deferred to/ from a unit undertaking manufacture and other operations in a bonded warehouse? Are such goods required to be under customs escort during their movement?

Response: Following are the customs document for movement of imported goods on which duty has been deferred to/ from a unit undertaking manufacture and other operations in a bonded warehouse:

i. Customs Station to Section 65 unit: Bill of entry for warehousing. It is clarified that no separate form is prescribed for movement from Customs station to Section 65 unit as the goods are already accompanied by the Bill of entry for warehousing.

ii. From another warehouse (non-Section 65) to a Section 65 Unit: Form for transfer of goods from a warehouse as prescribed under the Warehoused Goods (Removal) Regulations, 2016. This is because warehouse which is not a Section 65 unit has to follow the Warehoused Goods (Removal) Regulations, 2016.

iii. From Section 65 Unit to another warehouse (the other warehouse can be a Section 65 unit or a non-Section 65 warehouse): Form prescribed in Manufacture and Other Operations in Warehouse (no. 2) Regulations, 2019.

The goods will not be under customs escort during movement.

15. If the imported capital goods are cleared for home consumption after use, is depreciation available?

Response: No. Depreciation is not available if imported capital goods (on which duty has been deferred) are cleared for home consumption after use in a Section 65 unit.

16. If the imported capital goods are cleared for export after use, is depreciation available?

Response: The imported capital goods (on which duty has been deferred) after use in a Section 65 unit can be exported without payment of duty as per Section 69 of the Customs Act. For the purposes of valuation of the export goods, the same will be as per the Section 14 of the Customs Act read with the Customs Valuation (Determination of Value of Export Goods) Rules 2007.

17. Can all export benefits under FTP and Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017 (IGCR) be taken in Bonded warehouse simultaneously?

Response: The eligibility to export benefits under FTP or IGCR would depend upon the respective scheme. If the scheme allows, unit operating under Section 65 has no impact on the eligibility. In other words, a unit operating under Section 65 can avail any other benefit, if the benefit scheme allows.

18. What will be the method of inventory control method in Section 65 units? Whether First in First out (FIFO) method can be followed?

Response: The Generally Accepted Accounting Principles will be followed for inventory control in a Section 65 unit. Thus FIFO method can be followed.

19. What   are   the   procedure   and   documentation   requirements      for re-entry of manufactured goods, returned by the customers for repair, in the premises?

Response: Once the goods are cleared from the warehouse, they will no longer be treated as warehoused goods. Thus if the resultant goods cleared from the warehouse are returned by the customer for repair, they will be entered as DTA receipts (this is provided in the accounting form). After repair, when the same is cleared from the warehouse, the same will be entered in the prescribed accounting form.

If the goods were exported and subsequently rejected or sent back for repair by the customer, then the goods upon re-import have to be entered as Imports receipts in the accounting form. The relevant customs notification for re-imports has to be followed while filing the Bill of Entry for re-import of the goods.

20. What is the procedure for surrender of licence for a Section 65 unit?

Response: Since the unit operating under Section 65 is also licensed as a  Private Bonded warehouse under Section 58 of the Customs Act, the procedure for surrender of licence will be as per the regulation 8 of the Private Warehouse Licensing Regulations, 2016.A licensee may therefore, surrender the licence granted to him by making a request in writing to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be. On receipt of such request, the licence will be cancelled subject to payment of all dues and clearance of remaining goods in such warehouse.

21. What will be the treatment of restricted items?

Response: Please refer to CBIC instruction issued vide F.No. 450/147/2015-Cus.IV dated 26th February 2016 in the matter where it has been clarified that all regulatory checks shall be applied at the into bond stage for a bill of entry for warehousing. Thus all compliances are required before the goods can be utilized in a Section 65 warehouse.

22. How is hazardous cargo to be treated?

Response: Hazardous cargo has to comply with all extant laws. Operating under Section 65 does not exempt units from compliance to any applicable laws.

23. Can an existing Private warehouse licensee apply for Section 65 permission or do they have to file a new application?

Response: Please refer to Para 4 of Circular No. 34/2019-Customs dated 1st October 2019 wherein it has been clarified that applicants can seek a license under section 58 and

permission to operate under Section 65 synchronously, or request for permission under Section 65, if they already have a warehouse licensed under Section 58.

24. At what stage is PGA clearance required for Bills of Entry relating to warehousing?

Response: Please refer to CBIC instructions issued vide F.No. 450/147/2015-Cus.IV dated 26th February 2016 in the matter where it has been clarified that all regulatory checks shall be applied at the into bond stage for a bill of entry for warehousing.

25. Regulation 7 of MOOWR 2019 requires that a person who has been granted permission under regulation 5 shall appoint a warehouse keeper who has sufficient experience in warehousing operations and customs procedures to discharge functions on his behalf. Can a Customs broker be appointed as a warehouse keeper?

Response: Yes, a person who has passed the examination referred to in regulation 6 or regulation 13 of the Customs Broker Regulations, 2018 may be appointed as a warehouse keeper. There is also no bar in appointing any person who has sufficient experience in warehousing operations and customs procedures.

26. What is the procedure for termination of operations in the bonded warehouse and surrender of premises license? Whether payment of duty is required on inventory lying in the premises, particularly, if such goods are proposed to be exported in the near future?

Response: Since the unit operating under Section 65 is also licensed as a  Private Bonded warehouse under Section 58 of the Customs Act, 1962, the procedure for surrender of licence will be as per the regulation 8 of the Private Warehouse Licensing Regulations, 2016. A licensee may therefore, surrender the licence granted to him by making a request in writing to the Principal Commissioner of Customs or Commissioner of Customs, as the case may be. On receipt of such request, the licence will be cancelled subject to payment of all dues and clearance of remaining goods in such warehouse.  Thus duty on the remaining bonded inventory needs to be paid before surrender of license. In case the bonded goods are desired to be exported, the same needs to be done before surrender of the license.

27. Can existing AEOs continue to get AEO benefits once they switch over to MOOWR from DTA, EOU units?

Response: Operating under Section 65 has no effect on AEO status. All benefits available as an AEO continue notwithstanding operations under Section 65.

28. Whether at the time of filing the ex-bond Bill of Entry, the importer can claim exemption from customs duties as may be applicable under various Customs Tariff notifications?

Response: As per Section 15(1)(b) of the Customs Act 1962, the rate of duty in case of goods cleared from a warehouse shall be the rate on the date on which a bill of entry for home consumption is presented. Thus, the importer can claim exemption from customs duties under various Customs Tariff notifications as may be applicable on the date on which a Bill of Entry for home consumption is presented.

29. How would the valuation of the imported inputs be done for the purpose of payment of Customs duty in case of DTA clearances?

Response: The valuation of imported inputs for the purpose of payment of Customs duty shall be as per Section 14 and Section 15 (1)(b) of the Customs Act 1962.

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CBIC extends RoSCTL scheme validity till 31st March, 2021

CBIC extends RoSCTL scheme validity till 31st March, 2021

The Central Board of Indirect Taxes and Customs (CBIC), vide Notification No. 36/2020 – Customs dated 5th October, 2020, amends notification No.13/2020-Customs dated 14.02.2020 for extending the RoSCTL scheme validity from 31.03.2020 to 31.03.2021 or until such date the RoSCTL scheme is merged with RoDTEP scheme, whichever is earlier.

What is the RoSCTL Scheme?

The Rebate of State & Central Taxes and Levies (RoSCTL) Scheme is an export incentive in the form of transferable and sellable duty credit scrips offered on the basis of the FOB value of the export. It replaced the Rebate of State Levies (RoSL) scheme, a monetary incentive scheme under which Customs would deposit the rebate directly into the exporter’s bank account.

What do you mean by duty credit scrips?

  • Duty Credit Scrips (DCS) is an export promotion benefit offered by the Government of India under the Foreign Trade Policy.
  • A DCS provides tax incentives on exports, which can be used by exporters to set off their import duties. 
  • It can be used against tax liabilities arising out of basic customs duty, additional customs duty, safeguard duty, transitional specific safeguard duty, and anti-dumping duty. DCS can be transferred to others.
  • However, it cannot be used to set off GST, compensation cess, and education cess.

What do you mean by the FOB value of exports?

FOB means Freight on Board or Free on Board. FOB Value = Ex-Factory Price + Other Costs

Other Costs in the calculation of the FOB value shall refer to the costs incurred in placing the goods in the ship for export, including but not limited to, domestic transport costs, storage and warehousing, port handling, brokerage fees, service charges, etc.

Why was RoSCTL Scheme introduced?

Government had notified the scheme for Rebate of State Levies (RoSL) to mitigate the incidence of State VAT and other State taxes on export of garments and made-ups (falling under Chapters 61, 62 and 63 of AIR schedule of duty drawback).

In wake of complaints filed by USA against India to discontinue export incentive scheme (like MEIS), which was not in compliance with WTO guidelines, Commerce ministry had proposed new scheme- Rebate of State & Central Taxes and Levies Scheme (RoSCTL).

As certain State and Central levies remained unrebated in the export of garments and made-ups, Ministry of Textiles (MoT) vide notification No. 14/26/2016-IT dated 07.03.2019 notified the RoSCTL scheme to rebate the incidence of various State as well as Central taxes suffered on export of garments and made-ups.

Who is eligible to avail the RoSCTL scheme?

The RoSCTL scheme is available on garment exports to exports of made-up articles

How should one apply for the RoSCTL scheme?

  • An application for claiming rebate under RoSCTL on exports, shall be filed online, using digital signature, on DGFT website at http://dgft.gov.in with Regional Authority (RA) concerned in ANF 4R.
  • The relevant shipping bills shall be linked with the on-line application by the exporter/ applicant online.
  • There would be no requirement of linking e BRCs for applying for RoSCTL.
  • A maximum of 50 shipping bills would be allowed to be attached in one single application by the exporter in the online module.
  • In the case of exports made from non-EDI (electronic data exchange) ports, a separate application has to be filed for each export. It cannot be clubbed with exports from EDI ports either.
  • In the case of EDI exports from enabled ports, the port of registration will be the EDI port itself.
  • The applications are processed through an online system of the Directorate-General of Foreign Trade (DGFT) and approved on the basis of an online approval/check mechanism. Depending on the option selected in the application, the scrips are either handed over physically or by post.

What benefit is available under the RoSCTL scheme?

The benefit to exporters shall be given by DGFT in the form of duty credit scrips. The RoSCTL scrips are freely transferable in nature. RoSCTL licenses can be used for payment of Import duties or can be sold in the open market at a premium rate.

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What is the validity of Duty Credit Scrips?

Duty Credit Scrip shall be valid for a period of 24 months from the date of issue and must be valid on the date on which actual debit of duty is made. 

What rebates are available under the RoSCTL scheme?

The RoSCTL Scheme gives rebate of the state and central taxes. 

The list of State taxes and levies refunded are:

  • VAT on transportation fuel
  • Captive Power
  • Mandi Tax
  • Electricity Duty
  • Stamp Duty on all the Export Documents
  • SGST levied on inputs of production of cotton (raw) like fertilizers, pesticides
  • Any other kind of product purchases made from unregistered dealers
  • The material used for the transport sector and
  • The Coal used for production

The list of Central taxes and levies refunded are:

  • Central excise duty on fuel used in transportation
  • Embedded CGST paid on inputs like pesticides, fertilizers.
  • Any other material purchases from unregistered dealers.
  • Inputs for the transport sector and
  • CGST and compensation Cess on Coal used in the production of electricity.

The rates of RoSCTL scheme are notified in the following 4 schedules of No.14/26/2016-IT (Vol.II) of the Ministry of Textiles:

  • Schedule 1 pertains to Rates of State taxes and levies are the rates of State levies, for apparel and made-ups.
  • Schedule-2 pertains to Rates of embedded Central levies are the rates of Central levies, for apparel and made-ups.
  • Schedule 3 pertains Rates of AA (Advance Authorisation)- State taxes and levies are the rates of State and Central taxes, applicable for apparel exports when the fabric (including interlining) only has been imported duty free under Special Advance Authorization Scheme
  • Schedule 4 pertains to Rates of AA (Advance Authorisation)-embedded Central levies are the rates of embedded Central levies, applicable for apparel exports when the fabric (including interlining) only has been imported duty free under Special Advance Authorization Scheme

What is the recovery mechanism under the RoSCTL scheme?

The following are the conditions laid down under the Recovery Mechanism:

  • For Post Issue Scrutiny and Recovery purpose, every exporter has to maintain a record of shipping bills and all export-related documents for 3 years, from the date the Scrip was issued. Licensing Authority may call such documents in original at any time within 3 years. In case the applicant fails to submit the original documents on demand by Licensing Authority, the applicant shall be liable to refund the rebate granted along with interest at the rate prescribed under the Customs Act 1962, from the date of issuance of scrip.
  • In cases where more than the eligible amount has been issued and is noted by the RA, the exporter will have to refund the excess claim with interest as per para 3.19 of FTP (Foreign Trade Policy). If the exporter fails to refund or does not respond to the message from the RA even after 1 month (30 days), then action can be initiated by the RA as per FT (D&R Act), 1992 and Rules.
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